Healthcare
Fraud
/
Whistle-Blower
Cases
Under the False
Claims
Act a person who learns of
fraud
being committed against the government can file suit through his own privately retained attorney. The roots of the False Claims Act go all the way back to the civil war, when Abraham Lincoln signed this act into law to protect the government against fraudulent suppliers of war equipment. Based on an analysis of Medicaid and Medicare patients in 2001, 6.3% of those claims or some 12 billion dollars was improperly paid for a number of reasons, including fraud. The National Health Care Anti-fraud Association estimates that of the nation’s annual health care outlay, at least 3% or 51 billion a year is 2003 was lost to outright fraud.
How the False Claims Act Works
A person who brings the claim to the attention of the Federal government is known as a relator, and may be entitled to percentage of the recovery if certain conditions are met. The relator must be the original source of non-public information that has not previously been disclosed to the government. Relators should generally have first hand knowledge of the fraud and some supporting proof. Through a qui tam lawsuit the relator recovers losses sustained by the government through over-billing, fraud or other improper or illegal practices
Penalties and Recovery
If liability is established the offending party will be required to pay up to
three
times the
government's actual losses
plus a fine. The defendant also must pay the fees and the case-related expenses of the whistleblower’s attorney. A whistleblower who establishes his status as the original source of the information is entitled to 15% to 30% percent of whatever amount the government recovers as a result of their qui tam lawsuits. The amount varies, but can be many millions
of
dollars
if the government expenditures are significant enough. These potentially enormous recoveries for individual whistleblowers are designed to encourage people to come forward to report fraud and waste involving government expenditures.
Filing a False Claims Act
Lawsuit
False Claims Act cases are complex and require specialized knowledge of the law. Usually significant investigation takes place to substantiate the claims and properly present them to the government.
When a qui tam lawsuit is filed, it is filed "under seal,” so that
it
is not available to the general public. Even the accused defendant is not notified. The initial “seal” lasts 60 days to give the government time to investigate, but this deadline is often extended. After the government investigates the case, it decides whether to join, or intervene, in the qui tam lawsuit. If the government joins the case, the litigation is conducted jointly by the government and the whistleblower’s attorney. If the government declines to intervene, the relator may go forward with the lawsuit and assumes primary responsibility for running the case.
The timing of a lawsuit can be critical. The first person to file a case under the False Claims Act for a particular fraud preempts all other relators. So if you plan to bring a case, it is important to do so before another whistleblower beats you to the courthouse.
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